France releases 10 million barrels of diesel from reserves to lower prices

France will put 10 million barrels of diesel fuel from strategic reserves on the market within the next three months. The government expects the additional supply to lower the price of diesel at French petrol stations.

This was announced by French Prime Minister Sébastien Lecornu in an address on October 7, reports Europe 1.

According to the government's estimate, the use of the reserves could reduce the retail price of diesel fuel by about 12–18 euro cents per litre.

Lecornu explained that the fuel the authorities intend to release from reserves was purchased before the sharp rise in world prices. It will be supplied to the market at the cost of forming these reserves.

“This diesel was purchased before the price jump. It will be provided at the cost of these reserves, which will mechanically allow prices at the pumps to be reduced,” — stated the Prime Minister.

France's decision comes amid a sharp rise in fuel prices due to the war with Iran and the remaining risks to oil and petroleum product supplies through the Middle East. The diesel market is under particularly strong pressure.

The French measure is part of larger actions by the G7 countries. On October 2, the leaders of the “Group of Seven” agreed to release up to 100 million barrels of oil and petroleum products from strategic reserves over four months.

According to a statement from the Élysée Palace, actions will be coordinated with the International Energy Agency. The countries intend primarily to accelerate the market arrival of diesel fuel.

At the same time, the G7 states agreed to run their refining capacities at maximum levels and not to impose restrictions on energy resource exports between group members.

Diesel prices remain one of the most acute problems of the European fuel market. Limited refining capacity and disruptions to global supplies have led to significant increases in the cost of petroleum products, despite fluctuations in oil prices themselves.

The French government expects the release of reserves to quickly affect retail prices. However, the effect will depend on the situation in the world market, transportation costs and the further dynamics of petroleum product deliveries.